Market voices on:

A similar pattern was reflected in other indices. The first quarter saw the key benchmark equity index, MSCI World TR USD, increase by a meagre 0.99 per cent, while the benchmark Citigroup World Government Bond Index increased by 2.25 per cent this quarter.

This could signal risk aversion, with investors preferring safer haven assets - such as bond funds - even if they offer lower rates of returns.

Xav Feng, head of Asia-Pacific research for Lipper, the fund research firm which monitors the performance of all CPFIS funds, noted that the US Federal Reserve has sent a clear message that the interest rates are likely to stay low in the foreseeable future.

"Investors have interpreted that to mean that interest rates are not likely to increase until the middle of next year at the earliest, following the end of the recent asset purchase programme."

He also cited risks in Europe: "The crisis in Ukraine is causing concerns around regional stability. While these uncertainties persist, investors should consider the impact of global money flows, the state of the US economy and regional strife when reviewing their portfolios and making investment decisions."

This time, investors who used their CPF savings to buy equity funds would have done better than those that invested in bond funds. They would have enjoyed an 8.55 per cent rate of return on average, versus just 0.3 per cent from bond funds.

During this period, the MSCI World TR USD index soared 21.35 per cent, while the Citigroup World Government Bond Index TR rose by 2.75 per cent in Singapore-dollar terms.

Year 2013 had seen bullish sentiment in developed markets, particularly the US and Europe, as better growth prospects in both economies led investors to move their funds out of bonds into higher-yield equities.